(MDP) Meredith Adds Revenue Channels

Meredith Corporation (MDP) has been working diligently to explore and include alternative revenue generating opportunities for reducing its dependence on traditional advertising through acquisitions or by entering into strategic alliances.

Following its expansion strategy, Meredith in a recent move announced the acquisition of EatingWell Media Group and launched Recipe.com.  However, the terms of the deal were not disclosed.

EatingWell brings in an award-winning magazine with 350,000 circulation coupled with a popular website offering innovative ideas of cooking healthy meals, shopping tips and shares articles, blogs and nutrition advice to major customer portals and retail partners. The Recipe.com offers variety of recipes and savings coupon.

According to Meredith’s Chairman and CEO Steve Lacy, food remains the top advertising category of the company and the recent developments in food category will facilitate Meredith to better serve its 75 million women consumers through the strong multi-channel mechanisms of these companies to meet the ever increasing demand.

Further, the move is accretive to Meredith as EatingWell’s major portion of revenue comes from licensing, digital sources and custom marketing and Recipe.com has noteworthy digital and mobile trail, thus spreading its reach to a larger number of consumers in America.

EatingWell’s CEO Thomas Witschi, 50, will be joining as EVP and President of Women’s Lifestyle at the Meredith National Media Group.

Meredith is one of the leading media and marketing companies engaged in publishing, broadcasting, integrated marketing and interactive media. The company boasts of a strong portfolio of women’s magazines with a relatively stable circulation, which has helped it to gain market share.

The company has been taking initiatives to enhance its online presence. These include the acquisition of online marketing firms – Genex, New Media Strategies, and Healia, and a mobile marketing firm – The Hyperfactory. Meredith also launched Meredith Women’s Network covering mostly women-related topics. Monthly average unique visitors to the National Media Group websites were approximately 22 million, while monthly page views averaged 250 million.

However, more than half of Meredith’s revenue comes from advertising depending on the health of the economy. An economic downturn narrows the advertising demand. Although the economy is gradually regaining pace, publishing and broadcasting revenues still remain susceptible to changes in advertising demand.

Consequently, we maintain a long-term ‘Neutral’ on the stock. Moreover, Meredith, which competes with Martha Stewart Living Omnimedia Inc. (MSO),holds a Zacks Rank #3, which translates into a short-term ‘Hold’ rating.

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